Consumers will reduce their demand if they believe that the price increase is:
A) negligible.
B) affordable.
C) avoidable.
D) temporary.

Question

Quizplus · Accepted Answer

If consumers believe that the price increase is temporary, they may still make purchases, but reduce their demand or delay their purchases until the price returns to normal. Thus, option D is the best choice. Option A, B, and C indicate that consumers may still be willing to pay the higher price, which is not a reduction in demand.

Consumers Will Reduce Their Demand If They Believe That the Price